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THE SUPREME COURT OF NEW HAMPSHIRE

___________________________

Original

No. 2003-607

Petition of Terry M. Bennett

(New Hampshire Insurance Department)

Argued: May 5, 2004

Opinion Issued: June 21, 2004

Douglas, Leonard & Garvey, P.C., of Concord (Charles G. Douglas, III
and Benjamin T. King on the brief, and Mr. Douglas orally), for the
plaintiff.

Peter W. Heed, attorney general (Suzanne M. Gorman, senior assistant
attorney general, on the brief and orally), for the New Hampshire Insurance Department.

Broderick, C.J. The plaintiff, Terry Bennett, appeals the order of an insurance
department hearing officer dismissing, without prejudice, a notice of hearing issued by
the insurance commissioner. We reverse and remand.

The record supports the following facts. On June 16, 1993, the plaintiff contracted
with United Risk Management (URM) for an ITT Hartford Group, Inc. homeowners
insurance policy in the face amount of one million dollars, to be written by Twin City
Fire Insurance Company. On August 2, 1993, a fire destroyed the plaintiffs home. ITT
Hartford Group, Inc. subsequently paid the one million dollar face amount of the policy.
For discussion of the facts surrounding the plaintiffs earlier appeal to this court,
see Bennett v. ITT Hartford Group, Inc., 150 N.H. ___, 846 A.2d 560 (2004). The
plaintiff claims that he also contracted with URM for replacement cost coverage that would
have entitled him to additional coverage in excess of one million dollars. He claims that
ITT Hartford Group, Inc. and Twin City Fire Insurance Company (collectively, Hartford)
deleted this coverage from his policy without notice.

On May 20, 2003, the plaintiff filed a complaint with the New Hampshire Insurance
Department alleging that Hartford had illegally deleted the replacement cost coverage from
his policy. On June 11, 2003, the insurance commissioner issued a notice of hearing
pursuant to RSA 417:6 (1998) to determine whether Hartford had "engaged in unfair
claims settlement practices in violation of RSA 417:4, XV for failing to properly settle
claims made by [the plaintiff]." The notice of hearing stated "that it is in the
public interest to convene a hearing" and "that there is reason to believe that
[Hartfords] actions may have constituted unfair claims or settlement
practices."

Prior to the hearing, a hearing officer dismissed the notice, without prejudice to the
insurance departments right "to conduct further investigation of this matter
and to take whatever further action it may deem appropriate and warranted under the
statute." The hearing officer did so because she determined that the notice of
hearing failed to meet the requirements of RSA 417:6 in two respects:

First, the Notice of Hearing does not allege that the [insurance commissioner] had
reason to believe that [Hartfords] actions constituted an unfair or deceptive trade
practice. Instead, the Notice of Hearing recites only that the [insurance department] has
reason to believe that [Hartfords] actions may have constituted an unfair trade
practice. This recitation is on its face insufficient to meet the requirements of the
statute. Secondly, the Notice of Hearing does not propose any regulatory sanction, thus
raising a question as to the basis for the determination that a hearing on this matter
would be in the public interest. Although the statute does not mandate a regulatory
sanction for a violation of RSA 417, it is difficult to reconcile the required
determination that a proceeding under RSA 417 would serve the public interest with the
absence of a regulatory sanction.

(Emphasis omitted.) The plaintiffs motion for rehearing was denied, and this
appeal followed.

The plaintiff argues that the hearing officer erred by: (1) unlawfully, unjustly, and
unreasonably dismissing the notice of hearing; and (2) depriving him of his
constitutionally protected right to a remedy for injuries inflicted upon him, as
guaranteed by Part I, Article 14 of the New Hampshire Constitution.

The insurance department contends that the plaintiff has no statutory right to appeal
the hearing officers order under RSA chapter 541. We first address whether the
plaintiffs appeal is properly before us.

It is well settled that "[a]ppeals from administrative proceedings may be taken
under RSA chapter 541 only when . . . authorized by law." Petition of Hoyt,
143 N.H. 533, 534 (1999) (quotation and brackets omitted). RSA 417:11 (1998) provides that
parties "aggrieved by any order or decision of the insurance commissioner pursuant to
RSA 417:10 shall be entitled to an appeal to the supreme court in accordance with the
provisions of RSA 541." In this case, the insurance commissioner never issued such an
order or decision. Accordingly, the plaintiff has no statutory right of appeal under RSA
chapter 541.

This holding, however, does not preclude us from recasting the current appeal as a
petition for writ of certiorari, because our long-standing practice permits us to consider
an appeal mistakenly taken under RSA chapter 541 as a petition for writ of certiorari. Seeid. "Certiorari is an extraordinary remedy, which is not granted as a matter
of right but rather only when the court deems that the substantial ends of justice require
such relief." Appeal of Tamm, 124 N.H. 107, 110 (1983) (quotation omitted). In
this case, the plaintiffs appeal will be treated as a petition for writ of
certiorari. The scope of review on a petition for writ of certiorari is confined to a
determination of whether the hearing officer acted illegally with respect to jurisdiction,
authority or observance of the law, thereby arriving at a conclusion which could not be
legally or reasonably made or acted arbitrarily, capriciously or with an unsustainable
exercise of discretion. SeeAppeal of McDonough, 149 N.H. 105, 110 (2003).

The plaintiff argues that the hearing officer unlawfully, unjustly, and unreasonably
dismissed the notice of hearing. We agree. The hearing officer dismissed the notice of
hearing because it recited only that the insurance department had reason to believe that
Hartfords actions may have constituted an unfair trade practice, and not that the
commissioner had reason to believe that Hartfords actions did, in fact, constitute
an unfair trade practice.

RSA 417:6 requires the insurance commissioner to issue a notice of hearing
"[w]henever the commissioner shall have reason to believe that any [person engaged in
the business of insurance in this State] has been engaged or is engaging in any unfair
method of competition or any unfair or deceptive act or practice defined in RSA 417:4, and
that a proceeding by the commissioner in respect thereto would be to the public
interest." We have consistently stated that under this provision, the insurance
commissioner need only suspect a violation of RSA 417:4 in order to properly issue a
notice of hearing. SeeBell v. Liberty Mut. Ins. Co., 146 N.H. 190, 193
(2001); Appeal of Metropolitan Prop. & Liabil. Ins. Co., 120 N.H. 733, 737
(1980). A fair reading of the notice of hearing in this case demonstrates that the
insurance commissioner suspected that Hartford committed a violation of RSA 417:4. The
phrase "may have" preceding "constituted" merely reflects the fact
that a violation of RSA 417:4 had yet to be conclusively established. Indeed, the purpose
of the subsequent hearing would be to determine whether a violation actually occurred. See
RSA 417:10. The statement in the notice of hearing that "there is reason to believe
that [Hartfords] actions may have constituted unfair claims or settlement
practices" was not "on its face insufficient to meet the requirements of [RSA
417:6]."

The hearing officer also dismissed the notice of hearing because it did "not
propose any regulatory sanction, thus raising a question as to the basis for the
determination that a hearing on this matter would be in the public interest." The
hearing officer acknowledged, however, that RSA 417:6 "does not mandate a regulatory
sanction." RSA 417:6 simply requires that the insurance commissioner have reason to
believe that a proceeding regarding the violation "would be to the public
interest." Since the insurance commissioner found that it was "in the public
interest to convene a hearing," the hearing officer further erred in dismissing the
notice of hearing for failing to propose a regulatory sanction. Accordingly, we order that
the notice of hearing be reinstated. Nothing in this opinion, however, impedes the
insurance commissioner from exercising whatever discretion he may have to act upon the
notice of hearing upon remand.

The insurance department contends that "[t]he Commissioners subsequent
failure to [issue a new notice of hearing] for a period of 120 days after the dismissal
without prejudice is the equivalent of failing to take action on a complaint for 120 days,
which triggers the application of RSA 417:19, II." Therefore, it reasons that because
the plaintiff failed to file an appeal under RSA 417:19, II, this appeal is moot. In light
of our order that the notice of hearing be reinstated, we need not address this argument.

Finally, the plaintiff argues that the hearing officers order deprived him of his
constitutionally protected right to a remedy for injuries inflicted upon him, as
guaranteed by Part I, Article 14 of the New Hampshire Constitution. In light of our order
above, we need not address this argument.